About the Festival

The MIDAS team recently travelled to the 7th annual edition of the Singapore FinTech Festival where an estimated 60,000 attendees descended on the Singapore Expo for the world's largest FinTech conference. From 31st October to 4th November 850 speakers, 450 exhibitors and 25 international pavilions exhibited across the Expo Hall with participants from over 100 countries and 2,000 organisations participating.

The Monetary Authority of Singapore's theme for the 2022 conference was centred around ‘Building Resilient Business Models amid Volatility and Change’.

Viability looked at how FinTechs are building disruptive and resilient business models into their strategy, Responsibility analysed how organisations are balancing corporate responsibility concurrently with profitability, and Inclusivity investigated the ways in which FinTechs are designing inclusive business models to serve the global unbanked and underbanked.

Chief Fintech Officer of the Monetary Authority of Singapore, Sopnendu Mohanty, opened by discussing the FinTech industry on the cusp of pushing into three areas: Web3, Digital Assets, and an ESG-focused economy. The Singapore FinTech Festival was designed to reflect this shift focusing on finding solutions to today’s challenges and taking conclusive steps toward implementation across the financial sector.

The Highlights

Ravi Menon, MD of the Monetary Authority of Singapore, took a philosophical look at the innovation of the Financial Services and what comes next for FinTech in Singapore and he turned to the Chinese philosophy of Wu Xing, the 5 fundamental elements of Water, Metal, Fire, Wood and Earth. He likened these ‘agents of change’ to the 5 desired outcomes they are looking to achieve: Instant remittance, Atomic settlement, Programmable money, Tokenised assets and Trusted sustainability data.

“The five desired outcomes remind us that everything we do in finance, technology, and FinTech must have a larger purpose. We want to expand economic opportunity, enhance social inclusion, reduce risks, and protect our planet. The essential feature to achieve these desired outcomes is collaboration – collaboration between the public and private sectors; collaboration between incumbent financial institutions and emerging fintech firms; and collaboration across borders.”

 

“The value of cryptos may rise and fall, but local fiat currencies just fall and fall.”

Ethereum co-founder Vitalik Buterin highlighted the success of Ethereum’s recent illustrious Merge. The world’s second highest market cap cryptocurrency moved from a Proof of Work to Proof of Stake model in a controversial adjustment in September 2022, however the switch was alleged to improve energy efficiency, give better chain stability and allow greater network security.

“Proof of Work relies on a bunch of miners that are running computations on specialised hardware that costs millions of dollars 24/7.” Buterin went on to explain that there are still problems with scalability of blockchains and intermediaries like Binance: “The reality is that there are eight billion people in the world and most of them are not using blockchain. Even those that are using cryptocurrencies are not doing so through blockchain today.”

Buterin went on to discuss the role that Central Banks still have to regulate decentralised systems like Crypto, and well as Web3 concepts with potential future applications of Ethereum for use as identity to sign into online applications as is currently seen with Google and Facebook combined with NFTs as proof of attendance at events.

 “GFANZ was more harmful than helpful...”

Former Blackrock Chief Investment Officer for Sustainable Investing Tariq Fancy, and HSBC Global Asset Management’s former Head of Responsible Investments Stuart Kirk joined an insightful panel looking at “How should we understand ESG finance?” within the context of Greenwashing and investor’s relationship with climate change risks.

“There are three problems with ESG- miss-selling products or services that don't do what they say and have little impact...” quoted Kirk, “...’Proportionality’ where investors should have been looking at tech earnings or inflation, rather than diversity or ESG and climate, and ‘internal inconsistency’ where consumers and staff are told they are part of a family at their respective bank [and that] mental health and diversity matters.. and then they fire 20% of their workforce as soon as earnings fall.”

Fancy reflected on similar themes of systemic greenwashing citing that the appetite isn’t there for investors to relinquish returns for environmental benefit: “No one wants to and it doesn't matter, global capital is controlled by money managers, their fiduciary duty is on value not values.”

“Blackrock have $10tn AUM and they are 30 years old. It's exciting to know companies who will change the whole climate problem in 30 years don't even exist yet or have their small stand at the back of the exhibition today.”

“Voluntary efforts like GFANZ (as an outcome of COP26) will not work. The cost is transferred to youngest, poorest and darkest people in the world. Besides building tools, we need to have an Asian voice of capitalism not a New York one. Climate progress will be defined by the speed of the laggards not the leaders.”

“It was easier to start Bitcoin than to reform the Fed. It will be easier to start a new country than to reform the FDA”

Balaji Srinivasan, former Chief Technology Officer of Coinbase, and former general partner at the venture capital firm Andreessen Horowitz, continued the theme of decentralisation by introducing the concept of new digital states emerging from collectives of digital economy users. His work on the ‘Network State’ Srinivasan makes the case for creating a ‘Country in the Cloud’, what this means for our identity and the potential impact of decentralised financial products on the market.

“BNPL is a wedge- what else are you going to offer the consumer?”

Elsewhere, regulation was the subject of numerous panels across the Singapore conference throughout the week. Nikhil Rathi, Chief Executive of the Financial Conduct Authority joined a panel looking at ESG governance for the Financial Services industry revealed what robust and effective governance looks like and discussed the operational challenges to implementing it.

Much like in the UK, Singapore is grappling with Buy-Now-Pay-Later regulation and how sustainable the subsector is for the consumer and the “Buy Now, Pay Later; Regulate Soon?” panel looked at fairness, suitability and predatory lending practices in the collateralized debt 2.0 market. This comes at a time when the FCA is threatening buy-now pay-later firms with jail time using financial promotion ‘loophole’.

Staying with the FCA, Sachin Sadan; Director of ESG and Dr Ben Caldecott; Director, UK Centre for Greening Finance & Investment, discussed the transition to Net Zero, the difference between the EU’s SFDR and the UK’s Green Taxonomy, and the need for FS firms to explain their sustainability easily to the consumer and to the regulator. “Green mortgages are great…” Sadan explained, “...but what if they're only available to people who can make green home improvements like insulation? That creates inequality so we need products that can fill the gap to relate to the 'S' of ESG.”

Finally, Chinese conglomerate Ant Group emphasised the power of the Asian market with Alipay+, a suite of cross-border digital payments and marketing solutions that enable merchants, including SMEs, to better serve global customers and, in a unique move, announced they will expand the destination to mainland China ahead of the upcoming Asian Games in Hangzhou. Visitors from South Koran and Malaysia will now be able to pay with their home apps when visiting China, transacting in their home currencies at Chinese merchants including food and beverage chains, convenient stores and souvenir shops. The scale and capability of Ant Group’s technology infrastructure is as ambitious as it is flexible.

Snapshot of Singapore

Singapore is a key player in the global fintech network as a hub for high growing and digitally transforming Asian markets. In 2020 Findexable ranked Singapore the 4th highest ranked city globally for FinTech behind San Francisco, London and New York, dropping slightly to 10th place in the most recent 2021 report.

Despite a period of global correction for FinTech funding in 2022 due to a number of macro pressures such as interest rate rises leading to higher cost of capital, Singapore is bucking the trend, attracting the strongest funding in the ASEAN region with several mega rounds of FinTech funding having a huge impact on the sector as funding is directed towards higher growth markets and technology transformation. Inward FinTech investment is also extremely strong as the start-up investor ecosystem saw a record number of international FinTechs enter the market and create a presence.

Singapore has been a forerunner in its plans to be a global green finance hub with the Monetary Authority of Singapore, the country’s Central Bank, committing US$1.8 billion of its reserves to climate-related investments as well as launching the Project Greenprint; a collection of initiatives to harness technology and data to enable a more transparent, trusted and efficient ESG ecosystem to enable green and sustainable finance.

Singapore also looks beyond pure regulation to combine a mix of policy, finance, and sector engagement to drive innovation within their fintech sector. In the mid-2010s the Government pledged $170 million to incentivise global financial institutions to set up innovation labs in the city. As of last year, the city had produced 40 innovation labs working on almost 500 innovation projects.

This vision has helped raise Singapore’s reputation as a fintech hub and developed their local talent pool, with the innovation labs having created 180 high value jobs, around 60% of which are held by Singaporeans, helping to build their local talent pipeline for future leadership roles.

As well as being a leader in sustainable finance, the Government and Monetary Authority of Singapore set a strategic path towards future drivers of change in Digital Assets; piloting use cases with initiatives such as Project Guardian- a collaborative enterprise with the financial industry that seeks to explore the economic potential and value-adding use cases of asset tokenisation. Unlike the cross-section of UK, U.S. and European FinTech markets, Blockchain and Cryptocurrency makes up the largest part of Singapore’s Fintech market (20%), ahead of Payments (17%) and WealthTech (13%).

Greater Manchester's clean growth strategy to be carbon neutral by 2038 provides enormous economic and environmental potential for new investors.

To hear more about Greater Manchester's Green Finance strategy, check out our video below or contact Joseph Beaden (joseph.beaden@midas.org.uk).